South Korea to Legitimise the Blockchain and Cryptocurrency Industry

The South Korean government is expected to announce an industry classification system featuring ten categories soon. This is its first step in recognizing and legalizing the digital currency and blockchain industry in the country.

South Korea’s relationship with cryptocurrencies has had a tumultuous past. From the country being an important crypto market to crackdowns and imposition of strict regulations at the beginning of 2018, the authorities have frequently changed their outlook on digital currencies.

This time, however, a new industry classification system will break down the blockchain industry into ten categories and provide distributed ledger and cryptocurrency-based companies a new legitimate future. The new classification could be the first step by the South Korean government to legalize this industry, as reported by TheBChain.

What Does the New Plan Entail?

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Blockchain and cryptocurrency businesses will be added to the Korea Standard Industry Classification (KSIC) with three main categories and ten subdivisions. Blockchain platforms like Ethereum and IOS will be added to the “blockchain based system software development and supply” category, which pertains to the development of any operating system that allows the creation and development of dApps. It will also include HyperLedger and Solidity and other DIP-related work.

However, those creating applications based on blockchain for meeting specific needs or processing specific tasks will be classified as “blockchain based application software development and supply” firms. Businesses developing distributed ledger systems for finance, insurance, healthcare, security, etc. will be under this category. A separate category has been designed for companies providing cloud-based blockchain services like Microsoft Azure and Amazon Web Services (AWS).

What Could Crypto Exchanges Get in the New Classification?

Cryptocurrency exchanges will be classified as “encryption asset brokerages.” Joseph Young, a known crypto journalist, shared this on Twitter:

For the first time, the gov’t of South Korea will recognize crypto exchanges as regulated financial institutions. Previously, crypto exchanges were considered as “communication vendors.” Now, they are categorized as crypto asset exchange and brokerage.https://t.co/RJYYLaOLv0

The project has been undertaken by the National Statistical Office, the Ministry of Science and Technology and the Ministry of Information and Communication.

The primary investigation in this regard was launched in April this year. A government official noted that the new classification standards would be released by the end of this month after consultation with 160 different institutions. However, the official refused to provide details of the plan. Note that South Korean crypto exchanges have been victims of several heists and offices of several prominent exchanges were raided by the authorities earlier this month.

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